Yahoo Finance Be Sure To Check Out Cepatwawasan Group Berhad (KLSE:CEPAT) Before It Goes Ex-Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Cepatwawasan Group Berhad (KLSE:CEPAT) is about to go ex-dividend in just 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Therefore, if you purchase Cepatwawasan Group Berhad's shares on or after the 9th of April, you won't be eligible to receive the dividend, when it is paid on the 29th of April.
The company's upcoming dividend is RM00.04 a share, following on from the last 12 months, when the company distributed a total of RM0.02 per share to shareholders. Calculating the last year's worth of payments shows that Cepatwawasan Group Berhad has a trailing yield of 2.5% on the current share price of RM00.81. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Cepatwawasan Group Berhad
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Cepatwawasan Group Berhad's payout ratio is modest, at just 30% of profit. A useful secondary check can be to evaluate whether Cepatwawasan Group Berhad generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 39% of the free cash flow it generated, which is a comfortable payout ratio.
It's positive to see that Cepatwawasan Group Berhad's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see how much of its profit Cepatwawasan Group Berhad paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Cepatwawasan Group Berhad's earnings have been skyrocketing, up 31% per annum for the past five years. Cepatwawasan Group Berhad is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Cepatwawasan Group Berhad's dividend payments are broadly unchanged compared to where they were 10 years ago.
Final Takeaway
Has Cepatwawasan Group Berhad got what it takes to maintain its dividend payments? It's great that Cepatwawasan Group Berhad is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. Cepatwawasan Group Berhad looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
So while Cepatwawasan Group Berhad looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 2 warning signs for Cepatwawasan Group Berhad you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
